There are times when your savings may fail to take care of an urgent financial requirement. Although there are plenty of easy loan options available, they are often costly, have a complicated approval process, or the amount might be lesser than what you need.
If you want to make a high-value purchase, such as constructing a house, purchasing a motor vehicle, sponsoring a foreign trip, or funding hospital expenses, a loan against property can help you.
What is Loan Against Property?
Lenders offering loan against property accept the borrower’s residential or commercial property as collateral. Loan against property is also known as a mortgage loan. Although you will continue to live or work in the property that you pledge, the property’s legal rights will remain with the lender until the principal and interest are repaid in full. Because it is a secured loan, lenders offer unparalleled benefits on loan against property.
How Can a Loan Against Property Give You A Huge Amount of Money?
While most other loans or cards consider your income as the eligibility criteria, a loan against property determines the loan amount based on the property value. Hence, if your property value is high, you may expect a high loan amount.
The following are the benefits you may expect from a loan against property:
Loan Amount of up to 60%
A loan against property allows you to avail a loan amount of up to 60% of your property’s current market value. Hence, if your property is worth INR 1 crore, you may apply for a loan amount of INR 60 lacs. However, lenders also factor in your repayment capability while finalising the loan amount.
Fast Loan Processing
Lenders generally process loan against property faster than many other loans or cards. Lenders like PNB Housing Finance also offer the facility of online loan application. You need to enter personal details like name, email ID, and mobile number, and loan against property documents required is very less than other lenders to avail the LAP loan.
Attractive Interest Rates
Loan against property interest rates starts from 9.50%, making it possible for anyone to repay the loan in easy instalments. However, the effective rate of interest depends on the borrower’s credit score. Generally, lenders will offer you the best rates if your credit score is above 800.
You may get up to twenty (20) years for paying the loan against property principal and interest. Hence, a loan against property can easily fit into your monthly budget. However, if you choose a long tenure, the interest rate might be on the higher side.
Uninterrupted Property Use
A loan against property empowers you to encash the dormant value of your property. As long as you pay the EMIs on time, the property remains yours, and you continue to live in it. In the case of a default, however, the lender may initiate legal proceedings. But, before that, they offer a grace period to the borrower.
To avail a loan against property, you need to submit about eight documents, including age proof, address proof, income proof, and property documents. As lenders like PNB Housing Finance offer the facility of online uploading, you can save both time and hassle.
If money is a problem, loan against property is the best solution. Some lenders also offer doorstep service facility to ensure seamless transfer of loan amount into your account.